What happened?
A number of stocks jumped in the afternoon session after U.S. stocks climbed across the board as investors positioned for an eventful week defined by a key Federal Reserve interest rate announcement and high-profile corporate earnings releases.
Morningstar reported that roughly 36% of S&P 500 companies—including technology heavyweights Amazon, Alphabet, and Microsoft—are scheduled to report their quarterly results this week. Concurrently, the Federal Reserve is scheduled to announce its latest monetary policy decision on Wednesday, with money markets assigning a 90% probability that the central bank will leave the Fed Funds rate on hold, according to Morningstar.
Despite traders juggling fresh Middle East conflicts and artificial-intelligence valuation worries, Morningstar noted that anticipation surrounding resilient corporate health helped lift benchmark futures into positive territory. Morningstar highlighted data indicating that analysts expect S&P 500 companies to report a massive 30% jump in third-quarter earnings compared to a year ago.
Furthermore, Morningstar cited commentary from BondBloxx Investment Management suggesting that the market views this week's expected Fed hold as merely a temporary pause rather than the definitive end of the tightening cycle. Ultimately, Morningstar explained that falling Treasury yields in the run-up to Wednesday's central bank decision provided further support for the broader equity rally prior to the opening bell.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Maintenance and repair distributors company DXP (NASDAQ: DXPE) jumped 5.7%. Is now the time to buy DXP? Access our full analysis report here, it’s free.
- Engineered components and systems company Graham Corporation (NYSE: GHM) jumped 5.7%. Is now the time to buy Graham Corporation? Access our full analysis report here, it’s free.
- Maintenance and repair distributors company MSC Industrial (NYSE: MSM) jumped 3.8%. Is now the time to buy MSC Industrial? Access our full analysis report here, it’s free.
- Defense contractors company CACI (NYSE: CACI) jumped 4.9%. Is now the time to buy CACI? Access our full analysis report here, it’s free.
- Electrical systems company Powell (NASDAQ: POWL) jumped 4.2%. Is now the time to buy Powell? Access our full analysis report here, it’s free.
Zooming in on DXP (DXPE)
DXP’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 17.8% on the news that the company reported third-quarter results that showed a significant miss on profit expectations. While the industrial distributor's sales grew 8.6% year-over-year to $513.7 million, beating analyst estimates, its adjusted earnings did not meet forecasts. The company posted an adjusted profit of $1.34 per share, which was 14.4% below the consensus estimate of $1.57 per share. The market reacted negatively to the earnings shortfall, overlooking the better-than-expected revenue. This suggested that investors were more focused on profitability, and the failure to meet profit expectations led to a sharp sell-off in the shares.
DXP is up 52.4% since the beginning of the year, but at $164.22 per share, it is still trading 18.2% below its 52-week high of $200.84 from August 2026. Investors who bought $1,000 worth of DXP’s shares 5 years ago would now be looking at an investment worth $4,988.
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